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Income Tax Appellate Tribunal, KOLKATA BENCH “B(SMC
Before: SHRI MANISH BORAD, HON’BLE & SHRI SONJOY SARMA, HON’BLE
O R D E R
PER SONJOY SARMA, JM:
This is an appeal filed by the assessee against the order of National Faceless Appeal Centre, Delhi [hereinafter referred to as the ‘NFAC’] dated 30.07.2021 for A.Y. 2017-18. The assessee has taken the following grounds of appeal: “i. For that the orders passed by the lower authorities are arbitrary, erroneous, without proper reasons, invalid and bad in law, to the extent to which they are prejudicial to the interests of the appellant.
ii. For that the ld. CIT(A) erred in confirming the action of the AO in making addition of Rs. 3,00,000/- on the alleged ground of excess cash deposit and to tax the same u/s 115BBE of the Income-tax Act, 1961. iii. For that the ld. CIT(A) erred in upholding the action of the assessing officer who applied the provision of section 68 read with section 115BBe of the Act on wrong appreciation of the facts of the case.
Sunita Devi Maheshwari A.Y. 2017-18 iv. For that the ld. CIT(A) erred in holding that the statements given by the appellant, to explain the source of the cash deposited in the bank account in SBN, are contradictory and dismissed the appeal of the appellant on this ground. v. For that the ld. CIT(A) ought to have properly taken into consideration the submissions made and evidences adduced before him relating to amount of Rs. 3,00,000/- and ought to have allowed the appeal of the appellant. vi. For that the order of the ld. CIT(A) is perverse and liable to be set aside. vii. For that the appellant craves leave to amend, alter, modify, substitute, add to abridge and/or rescind any or all of the above grounds.”
The facts in brief are brought out by Assessing Officer in his order vide para no. 1 & 2 are extracted below for ready reference: i. The return of income for the A.Y. 2017-18 was originally filed electronically on 24.04.2017 showing total income of Rs. 8,15,270/-. Subsequently, the case was selected for ‘Limited scrutiny assessment under CASS’ with the reason specified as the cash deposits during demonetization period.
ii. Upon selection of scrutiny, notice under section 143(2) of the Income-tax Act (hereinafter referred to as ‘the Act’) was issued on 09.08.2018 that was duly served on the assessee. Thereafter, notice under section 142(1) of the Act along with a questionnaire calling for various details and documents were also issued on different dates viz. 07.06.2019, 06.08.2019 and 02.09.2019 which were also served upon the assessee”.
In response to the aforesaid notice, the assessee submitted online submission within certain details and documents time to time. The AO considered the explanation of the assessee and rejected the explanation and the AO added cash deposit of Rs. 3,00,000/- made in IDBI Bank on 28.11.2016 was remained unexplained cash deposit and the same is charged u/s 115BBE of the Act.
Dissatisfied with the above order, the assessee preferred and appeal before the ld. CIT(A) and upheld the order of the A.O.
Sunita Devi Maheshwari A.Y. 2017-18 5. The ld. counsel of the assessee submitted that the appellant had deposited cash of Rs. 13,00,000/- in her bank account during demonetization period and during assessment proceedings, the appellant submitted that Rs. 10,00,000/- already disclosed under IDS-2016 and for remaining Rs. 3,00,000/-, the appellant prima facie submitted that it was out of cash in hand from earlier savings, withdrawals. He submitted that the addition is made only on the ground of presumption that assessee had Rs. 2,80,000/- cash in hand till 31.03.2016. Then why she would have withdrawn Rs. 95,000/- upto 08.11.2016. Further, he argued that the AO on surmises and conjectures held that cash would have kept with assessee, then why she would have withdrawn of Rs. 95,000/- upto 08.11.2016. He argued that the addition made on presumption and assumption and such inference cannot be sustained.
Ld. DR submitted that the ld. CIT(A) at page 12 vide para 9 recorded that there is a particular pattern of cash withdrawal of Rs. 95,000/- upto 08.11.2016 even after assessee claimed that she had Rs. 2,00,000/- cash in hand till 31.03.2016 and as such ld. DR relied upon the orders of AO as well as ld. CIT(A).
While deciding this appeal, the assessee raised 7 grounds of appeal and ground no. 2 is goes roots of the matter therefore we are going to decide this issue and remaining grounds are general or consequential in nature therefore these are need not required to be adjudicate upon.
8. We after hearing rival contention of the parties and documents on record and orders of the authorities below. The sole ground on which addition has been made is that the appellant deposited cash of Rs. 13,00,000/- in her bank account during the demonetization period and during assessment proceeding, the assessee submitted that Rs. 10,00,000/- disclosed under IDs-2016 and remaining Rs. 3,00,000/- it was out of cash in hand from earlier savings withdrawals, but the AO was of the view that when appellant had Rs. 2,80,000/- in hand till 31.03.2016 that event why she would have withdrawn Rs. 95,000/- upto 08.11.2016. An addition made only on the sole ground of Sunita Devi Maheshwari A.Y. 2017-18 assumption cannot be sustained the explanation of assessee cannot be rejected and hence the addition confirmed by the ld. CIT(A) is not correct.
9. We find that the ld. AO has made the addition merely on surmises and conjectures without assigning any cogent reason to justify the addition. Since source of the alleged amount is from part savings and opening cash in hand, in our view addition for Rs. 3,00,000/- was not warranted. Thus finding of ld. CIT(A) is reversed and the addition in question is deleted and appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 26.07.2022.